STRATEGIC DECISION-MAKING SUPPORTED BY TRADITIONAL FINANCIAL INDICATORS

Zoltan Musinszki (musinszki.zoltan@uni-miskolc.hu) and Gabor Bela Suveges (suveges.gabor@uni-miskolc.hu)
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Zoltan Musinszki: Institute of Accounting and Finance, Faculty of Economics, University of Miskolc, Miskolc, Hungary
Gabor Bela Suveges: Institute of Accounting and Finance, Faculty of Economics, University of Miskolc, Miskolc, Hungary

Oradea Journal of Business and Economics, 2019, vol. 4, issue 1, 29-37

Abstract: Traditional financial indicators calculated from financial statements cannot provide adequate information for the management, do not support strategic decisions. The reason for this is the methodology used in producing financial statements and the operational logic of financial accounting. Financial accounting thinks in terms of business year that is 12 months. It deals with events of the past, more accurately, with so called economic activities. Financial accounting evaluates such economic activities in terms of monetary processes, which means that the traditional financial indicators have their limits in application. Could it mean that traditional financial indicators cannot be used in the long-term strategic decision making? In our study we point out two connections between financial indicators and strategic decision making. Firstly, we focus on financial indicators used in supported strategic decision making, in strategic indicator systems. Secondly, we focus on cases in which financial indicators complement the methods of strategic decision making, add something to the tools available in strategic management.

Keywords: : financial statement; financial indicators; strategy; strategic decision making; Balanced Scorecard. (search for similar items in EconPapers)
JEL-codes: C80 G30 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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